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FedNat holds strategic review
Posted on Thursday, 05 November 2020 14:35
FedNat Holding is carrying out a review of its business plan, capital deployment, geographic footprint and long-term strategy to identify alternatives in an effort to boost shareholder value.

The US regional insurance holding company has hired Piper Sandler as financial advisor for the process, which could include a business combination or other possible transaction,

Chairman Bruce Simberg said: “The board recognises that the current catastrophe environment is creating significant challenges for the company.

“Today’s additional step to form a strategic review committee is intended to broaden and deepen our ongoing strategic evaluation processes so that we may consider and focus on additional alternatives to enhance shareholder value.

“At the same time, our management team will continue to execute on our current strategies to improve our operations and position the company for future growth in earnings and book value.”

FedNat, which closed yesterday with a capitalisation of USD 71.53 million, is a property and casualty insurance provider in the Florida homeowners market.

The company also offers the same policies in coastal states, including Louisiana, South Carolina, Texas and Alabama.

It markets and distributes its own and third-party insurers’ products and other services through a network of independent agents.

News of the review came the same day as FedNat announced results for the nine months ended 30th September 2020.

The company’s profit of USD 7.90 million in Q1-3 2019 turned to a net loss of USD 40.09 million in Q1-3 2020.

Revenues for the period totalled USD 347.03 million, compared to USD 305.97 million over the same timeframe in 2019.

It had gross written premiums of USD 558.49 million, up from USD 460.53 million in Q1-3 2019.

Zephyr, the M&A database published by Bureau van Dijk, shows 1,346 deals targeting the global insurance sector have been announced in 2020 to date.

Aon’s USD 30.03 billion acquisition of Willis Towers Watson is currently the year’s largest, as well as being the sector’s fourth biggest on record.

© Zephus Ltd